MIRA INFORM REPORT

 

 

Report Date :

01.02.2007

 

IDENTIFICATION DETAILS

 

Name :

GUJARAT NARMADA VALLEY FERTILIZERS COMPANY LIMITED

 

 

Registered Office :

P. O. Narmadanagar, District Bharuch - 392 015, Gujarat, India

 

 

Country :

India

 

 

Financials (as on) :

31.03.2006

 

 

Date of Incorporation :

10.05.1976

 

 

Com. Reg. No.:

04-2903

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

BRDG00702C

 

 

PAN No.:

[Permanent Account No.]

AAACG8372Q

 

 

Legal Form :

A public limited liability company.  The company's shares are listed on the Stock Exchanges.

 

 

Line of Business :

Manufacturing and Selling of fertilizers viz. urea, ammonium nitro-phosphate and calcium ammonium nitrate, chemicals viz. ammonia, methanol, formic acid, acetic acid, nitric acids and ammonium nitrate melt and electronics viz. digital switching systems and printed circuit boards.

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 

Maximum Credit Limit :

USD 47000000

 

 

Status :

Good

 

 

Payment Behaviour :

Usually correct

 

 

Litigation :

Clear

 

 

Comments :

Subject is a well established and reputed company having satisfactory track.  Directors are experienced, respectable and qualified professionals.  Their trade relations are reported as fair.  General financial position is satisfactory.  Payments are usually correct and as per commitments. 

 

The company can be considered good for normal business dealings at usual trade terms and conditions.

 

LOCATIONS

 

Registered/Factory Office :

P. O. Narmadanagar, District Bharuch - 392 015, Gujarat, India

Tel. No.:

91-2642-247001/2/3/4/5/6/7/8/9

Fax No.:

91-2642-247084/247057

E-Mail :

pnanavati@gnvfc.com

Website :

http://www.gnvfc.com

 

 

Factory 1 :

GNFC Infotower, 3rd Floor, Bodakdev Gandhinagar - Sarkhej Highway, Ahmedabad – 380 054, Gujarat

 

DIRECTORS

 

Name :

Mr. Balwant Singh

Designation :

Managing Director

Date of Birth/Age :

52 Years

Qualification :

06.12.1951

Experience :

M. Sc. Banaras Hindu University, M. A. University of Reading (UK) P. G. Diploma in Management, IGNOU

Date of Appointment :

31.10.2002

Other Directorships

1.       Gujarat State Fertilizers and Chemicals Limited

2.       The Fertilizer Association of India

3.       Gujarat Agri Processing Company Limited

4.       Gujarat Chemical Port Terminal Company Limited

5.       Narmada Chematur Petrochemicals Limited

6.       Gujarat Narmada Finance and Investment Company Limited

1.      Gujarat State Fuel Management Company Limited

 

 

Name :

Dr. Manjula Subramaniam

Designation :

Director

Date of Birth/Age :

55 Years

Qualification :

18.09.1948

Experience :

M. Sc. (Physics), Doctorate in Commerce, Masters’ in Public Administration at Harvard University

Other Directorships

1.      Gujarat State Fertilizers and Chemicals Limited

2.      Gujarat Alkalies and Chemicals Limited

3.      Gujarat State Petroleum Corporation Limited

4.      Gujarat State Energy Corporation Limited

5.      Gujarat State Fuel Management Company Limited

6.      Gujarat State Pertronet Limited

7.      Gujarat State Electricity Corporation Limited

8.      The Ahmedabad Electricity Company Limited

9.      Gujarat Industries Power Company Limited

10.  Gujarat Power Corporation Limited

11.  Gujarat Energy Transmission Corporation Limited

12.  Gujarat Alumina Bauxite Limited

·         Gujarat State Investments Limited

 

 

Name :

Mrs. Sudha Anchalia

Designation :

Director

Date of Birth/Age :

54 Years

Qualification :

M. A. (Economics)

Other Directorships

1.      Sardar Sarovar Narmada Nigam Limited

2.      Infrastructure Finance Company Gujarat Limited

3.      Gujarat Industrial Investment Corporation Limited

4.      Gujarat State Investments Limited

5.      Gujarat State Fertilizers and Chemicals Limited

·         Gujarat State Financial Services Limited

 

 

Name :

Mr. A. K. Luke

Designation :

Executive Director

Date of Birth/Age :

55 Years

Qualification :

B. Technical (Civil Engineering), IIT, Mumbai

Other Directorships

1.      GSFC Investment and Leasing Company Limited

2.      Gujarat Agri Processing Company Limited

3.      The Fertilizer Association of India

4.      Indian Potash Limited

5.      Gujarat Industries Power Company Limited

·         Gujarat State Fertilizers and Chemicals Limited

 

 

Name :

Mr. R. C. Desai

Designation :

Executive Director

Date of Birth/Age :

57 years

Qualification :

B.E. (Mech.)

Experience :

35 years

Date of Appointment :

16.01.1979

Other Directorships

GSFC, Baroda - Plant Engineer

 

Name :

Mr. J. K. Shah

Designation :

Executive Director

Date of Birth/Age :

57 years

Qualification :

B.E. (Elect.)

Experience :

35 years

Date of Appointment :

15.07.1978

Other Directorships

GSFC, Baroda - Plant Manager

 

 

Name :

Mrs. Manu Shroff

Designation :

Executive Director

Date of Birth/Age :

73 Years

Qualification :

B. A. (Hons), B.Sc. (Eco), Londoan, Bar at Law

Other Directorships

1.      Atul Limited

2.      The Great Eastern Shipping Company Limited

3.      Gujarat Alkalies and Chemicals Limited

4.      Nirma Limited

5.      Gujarat State Electricity Corporation Limited

6.      Gujarat Energy Transmission Corporation Limited

  1. Hindustan Oil Exploration Company Limited

 

 

Name :

Mr. S G Mankad

Designation :

Chairman

 

 

Name :

Mr. Pankaj Kumar

Designation :

Director (IAS)

 

 

Name :

Mr. TT Ram Mohan

Designation :

Director

 

 

Name :

Mr. Ashok Shah

Designation :

Director

 

 

Name :

Mr. D C Anjaria

Designation :

Director

 

 

Name :

Mr. P N Vijay

Designation :

Director

 

 

Name :

Mr. T Natarajan

Designation :

Joint Managing Director

 

 

Name :

Mr. P. K. Laheri

Designation :

Chairman

 

 

Name :

Mr. N. R. Ranganathan

Designation :

Director

 

 

Name :

Mr. S. M. Jain

Designation :

Director

 

 

Name :

Mr. Rajnish Aggarwal

Designation :

Director

 

 

Name :

Mr. R. P. Vyas

Designation :

Director

 

 

Name :

Mr. M. D. Vaghela

Designation :

Director

 

 

Name :

Mr. V. K. Khanna

Designation :

Director

 

 

Name :

Mr. B. P. Adesara

Designation :

Director

 

 

Name :

Mr. Mukesh Bagwat

Designation :

Director

 

 

Name :

Mr. J. J. Bhavsar

Designation :

Director

 

 

Name :

Mr. B. M. Bhayana

Designation :

Director

 

 

Name :

Mr. Buch J. C.

Designation :

Director

 

 

Name :

Mr. N. A. Buch

Designation :

Director

 

 

Name :

Mr. D. P. Dalal

Designation :

Director

 

 

Name :

Mr. K. M. Daniel

Designation :

Director

 

 

Name :

Mr. R. H. Dave

Designation :

Director

 

 

Name :

Mr. M. T. Desai

Designation :

Director

 

 

Name :

Mr. M. Devaranjan

Designation :

Director

 

 

Name :

Mr. B. C. Goswami

Designation :

Director

 

 

Name :

Mr. D. D. Kher

Designation :

Director

 

KEY EXECUTIVES

 

Name :

Mr. P. B. Nanavati

Designation :

Director

 

 

Name :

Mr. D. S. Taunk

Designation :

Director

 

 

Name :

Mr. R P Vyas

Designation :

Director

 

 

Name :

Mr. K A Shah

Designation :

Director (On Deputation with NCPL)

 

 

Name :

Mr. R. B. Panchal

Designation :

Company Secretary

 

MAJOR SHAREHOLDERS

 

Names of Shareholders

No. of Shares

Percentage of Holding

Indian

 

 

Bodies Corporate

64006713

43.89

Public Shareholding

 

 

Institutions

 

 

Mutual Funds/UTI

11213586

7.69

Financial Institution/ Banks

22723189

15.58

Foreign Institutions Investors

3576013

2.45

Non Institutions

 

 

Bodies Corporate

3683789

2.53

Individual

 

 

Individual   shareholders holding nominal share capital up to
  Rs. 0.100 Millions

34688863

23.78

Individual   shareholders holding nominal share capital in excess  of Rs. 0.100 Millions

5065361

3.47

Any Other
(specify) Trust

299161

0.21

Co-op Society

353448

0.24

C.M. Pool A/c

236101

0.16

GRAND TOTAL

146476214

100.00

 

BUSINESS DETAILS

 

Line of Business :

Manufacturing and Selling of fertilizers viz. urea, ammonium nitro-phosphate and calcium ammonium nitrate, chemicals viz. ammonia, methanol, formic acid, acetic acid, nitric acids and ammonium nitrate melt and electronics viz. digital switching systems and printed circuit boards.

 

 

Products :

Product Description

Item Code No.

Urea

310210

Ammonium Nitro Phosphate

310230

Acetic Acid

291521

 

PRODUCTION STATUS

 

Particulars

Unit

Licensed Capacity

Installed Capacity

Actual Production

Ammonia

MT

445500

445500

522090

Urea

MT

594000

636000

642832

Ammonium Nitro Phosphate

MT

142500

142500

203575

Calcium Ammonium Nitrate

MT

142500

142500

172808

Methanol

MT

116300

150000

222327

Formic Acid

MT

10000

10000

15456

Acetic Acid

MT

150000

100000

142978

Concentrated Nitric Acid

MT

66000

66000

70600

 

GENERAL INFORMATION

 

No. of Employees :

1837

 

 

Bankers :

v      Union Bank of India

v      Bank of India

v      Vijaya Bank

 

 

Facilities :

SECURED LOANS:

31.03.2006

FROM BANKS:

 

Rupee Loan

373.841

FCNR (B) Loan

91.266

 

465.107

OTHER LOANS FROM BANKS:

 

Cash Credit .& Overdraft Accounts

1261.029

Short Term Loans from Banks

950.000

 

2211.029

Total

2676.136

(a) Term Loan from Financial Institution is secured by first mortgage on the Company's immovable properties, both present and future, and hypothecation of all movable assets of the Company except book debts including movable machinery, spares, tools and accessories, present and future, subject to prior charges created and/ or to be created in favour of Company's Bankers on the Company's stock-in-trade and stores and such other movables as may be agreed to by the lenders for securing the borrowings for working capital requirements.

(b) In respect of Term Loans from Banks;

(i) Rupee Loans of Rs. 292.020 Millions are secured by creating/ extending first equitable mortgage on the entire Fixed Assets, both present and future, of the Company.

(ii) Rupee loans of Rs. 81.821 Millions and FCNR (B) Loans of Rs. 91.266 Millions are secured by hypothecation of movable machinery of the Company acquired and/ or to be acquired and installed out of the said loans.

(c) Other Loans from banks as Cash Credit Accounts and Short Term Loans are secured by first charge by way of hypothecation of stocks and book debts.

(d) All the above charges are ranking pari-passu among the lenders.

(e) Overdraft facility with banks is secured against the pledge of Term Deposit Receipts with the respective banks.

UNSECURED LOANS:

 

From Government of Gujarat for Water Supply Scheme

30.500

Fixed Deposits

17.017

Total

47.517

 

 

 

Banking Relations :

Good

 

 

Auditors :

C. C. Chokshi & Company

Chartered Accountants

 

 

Associates/Subsidiaries :

v      Gujarat State Fertilizers Corporation Limited

v      Gujarat State Fertilizers and Chemicals Limited

v      Gujarat State Investments Limited

v      Gujarat Agri Processing Company Limited

v      Gujarat Chemical Port Terminal Company Limited

v      Gujarat Narmada Finance & Investment Company Limited

 

Subsidiaries:

 

v      Narmada Chematur Petrochemicals Limited

v      ING Satcom Limited

 

CAPITAL STRUCTURE

 

Authorised Capital :

No. of Shares

Type

Value

Amount

250000000

Equity shares

Rs. 10 each

Rs. 2500.000 millions

 

Issued,:

No. of Shares

Type

Value

Amount

148565000

Equity shares

Rs. 10 each

Rs. 1485.650 millions

Subscribed & Paid-up Capital

 

 

 

146476214

Equity shares

Rs. 10 each

Rs. 1464.762 millions

 

FINANCIAL DATA

[all figures are in Rupees Millions]

 

 

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

 

31.03.2006

31.03.2005

31.03.2004

SHAREHOLDERS FUNDS

 

 

 

1] Share Capital

1464.762

1464.800

1464.762

2] Share Application Money

0.000

0.000

0.000

3] Reserves & Surplus

10308.080

8070.700

6511.003

4] (Accumulated Losses)

0.000

0.000

0.0000
NETWORTH

11772.842

9535.500

7975.765

LOAN FUNDS

 

 

 

1] Secured Loans

2676.136

4803.400

3533.058

2] Unsecured Loans

47.517

187.500

2127.013
TOTAL BORROWING

2723.653

4990.900

5660.071

DEFERRED TAX LIABILITIES

1800.551

0.0000

2077.007
 

 

 

 
TOTAL

16297.046

14526.400

15712.843
 

 

 

 
APPLICATION OF FUNDS

 

 

 
 

 

 

 
FIXED ASSETS [Net Block]

8510.961

8730.200

9347.158
Capital work-in-progress

486.282

666.800

251.451
 

 

 

 
INVESTMENT

2182.027

2180.500

1958.732
DEFERREX TAX ASSETS

 

 

 
 

 

 

 
CURRENT ASSETS, LOANS & ADVANCES

 

 

 
 
Inventories
2709.935
2607.500

1750.103
 
Sundry Debtors
4301.240
2895.900

1829.497
 
Cash & Bank Balances
550.195
721.700

2021.646
 
Other Current Assets
0.000
0.000

14.265
 
Loans & Advances
1266.368
5317.700

1845.214
Total Current Assets
8827.738
11542.800

7460.725
Less : CURRENT LIABILITIES & PROVISIONS
 
 

 
 
Current Liabilities
2629.587
4406.000

2475.334
 
Provisions
1090.256
4212.100

873.890
Total Current Liabilities
3719.843
8618.100

3349.224
Net Current Assets
5107.895
2924.700

4111.501
 

 

 

 
MISCELLANEOUS EXPENSES

9.881

24.200

44.001
 

 

 

 
TOTAL

16297.046

14526.400

15712.843

 

PROFIT & LOSS ACCOUNT

 

PARTICULARS

 

31.03.2006

31.03.2005

31.03.2004
Sales Turnover [including other income]

22328.072

18653.301

14468.440
 

 

 

 
Profit/(Loss) Before Tax

4465.550

3304.245

1847.771
Provision for Taxation

1518.320

1064.044

678.707
Profit/(Loss) After Tax

2947.230

2240.201

1169.064
 

 

 

 
Export Value

0.540

69.785

0.925
 

 

 

 
Import Value

648.231

725.049

438.191
 

 

 

 
Total Expenditure

17862.522

15349.056

13021.694

 

 

QUARTERLY

 

PARTICULARS

 

30.06.2006 (1st Quarter)

30.09.2006 (2nd Quarter)

31.12.2006 (3rd Quarter)

Sales Turnover

4312.000

6878.300

5230.800

Other Income

49.800

110.400

155.600

Total Income

4361.800

6988.700

5386.400

Total Expenditure

3420.500

5656.300

4348.800

Operating Profit

941.300

1332.400

1037.600

Interest

17.800

24.200

32.400

Gross Profit

923.500

1308.200

1005.200

Depreciation

213.500

209.000

212.400

Tax

268.200

392.700

297.400

Reported PAT

470.500

739.500

521.900s

 

200606 Quarter 1  - Expenditure Includes (Increase) / Decrease in Stock in Trade Rs.. (501.90)million Consumption of Raw Materials Rs 1938.90 million Purchase of Goods for Sale Rs 464.40 million Power, fuel & Other Utilities Rs 586.80 million Staff Cost Rs 316.40 million Other Expenditure Rs 615.90 million Tax includes Provision for Current Tax Rs 263.70 million Deferred Tax Rs (28.70)million Fringe Benefit Tax Rs 4.50 million EPS is Basic Status of Investor Complaints for the quarter ended June 30, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 145 Complaints disposed off during the quarter 145 Complaints unresolved at the end of the quarter Nil 1. A limited Review of the results for April-June 2006 has been carried out by the Auditors at the Company. 2. ''Other Income'' for the three months ended June 30, 2005 (Previous period) included a sum of Rs 354.30 million being write back of excess provision made in earlier years since no longer requires. 3. The process of merger of Narmada Chematur Petrochemicals Limited a subsidiary of the Company with the Company is under progress. 4. The above results were reviewed by the Audit Committee of Directors in its meeting held on July 13, 2006 and taken on record and Approved by the Board Of Directors at its meeting held on July 15, 2006.

 

200609 Quarter 2  - Expenditure Includes (Increase) / Decrease in Stock in Trade Rs 388.50 million Consumption of Raw Materials Rs 2544.90 million Purchase of Goods for Sale Rs 721.50 million Power, fuel & Other Utilities Rs 1000.70 million Staff Cost Rs 423.40 million Other Expenditure Rs 577.30 million Tax includes Provision for Current Tax Rs 389.60 million Deferred Tax Rs (33.00)million Fringe Benefit Tax Rs 3.10 million EPS is Basic Status of Investor Complaints for the quarter ended September 30, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 218 Complaints disposed off during the quarter 218 Complaints unresolved at the end of the quarter Nil 1. A limited review of the above results has been carried out by the Auditors of the Company. 2. Other Income for the six months ended September 30, 2005. (previous period) included a sum of Rs 354.30 million being write back of excess provision made in earlier years since no longer required. 3. A petition for sanctioning the Scheme of amalgamation of Narmada Chematur Petrochemicals Limited., a subsidiary of the Company with the Company w.e.f, April 01, 2005, is pending before the Hon'ble High Court of Gujarat. 4. The above results were reviewed by the Audit Committee of Directors in its meeting held on October 17, 2006 and taken on record & approved by the Board of Directors at its meeting held on October 19, 2006.

 

200612 Quarter 3 - EPS is Basic & Diluted Status of Investor Complaints for the quarter ended December 31, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 249 Complaints disposed off during the quarter 249 Complaints unresolved at the end of the quarter Nil 1. During the quarter, there were 36 Nil production days in Ammonia plant and 30 Nil production days in other plants (previous period : None) on account of machinery breakdown in Ammonia plant and other repairs. The plants have been recommissioned during the quarter. The Company has Mega Insurance policy and has lodged insurance claim for Rs. 480.00 million towards material damages and loss of profit to the extent covered. 2. The Company has so far been accounting all insurance claims on cash basis. However, in line with industry practice for accounting claims with significant financial impact, this policy is reviewed and revised to accrual basis. Consequently, the company has conservatively estimated the insurance claim & recognized the same on accrual basis during the quarter. Adjustments to the said claim would be made on its finalization. 3. Other Income for the nine months ended December 31, 2005 (previous period) included a one time write back of excess provision of Rs 354.30 million made in earlier years but no longer required. 4. Other Expenditure of the current period includes contribution of Rs 100.00 million (Previous Period - Rs 100.00 million) made to the Gujarat Chief Minister's Relief Fund as a part of the Company's Corporate Social Responsibility. 5. Pending formulation as well as announcement of New Pricing Policy by the Government of India for fertilizer subsidy, the quantum of subsidy for Urea for the quarter and nine months period ended on December 31, 2006 has been considered based on Stage II parameters of the New Pricing Scheme (NPS-II) which came to an end on March 31, 2006. 6. Hon'ble High Court of Gujarat has passed an order on January 09, 2007 sanctioning the scheme of Amalgamation of a Subsidiary of the Company, Narmada Chematur Petrochemicals Limited, with the Company with effect from April 01, 2005. Pending completion of the formalities such as filing certified copy of the said order with registrar of companies on its receipt etc., no effect has been given in the above financial results. 7. A limited review of the above results has been carried out by the Auditors of the Company. 8. The above results were reviewed by the Audit Committee of Directors at its meeting held on January 17, 2007 and taken on record & approved by the Board of Directors at its meeting held on January 19, 2007.

 
KEY RATIOS

 

PARTICULARS

 

31.03.2006

31.03.2005

31.03.2004

Debt Equity Ratio

0.36

0.61

0.84

Long Term Debt Equity Ratio

0.09

0.25

0.46

Current Ratio

1.02

0.94

0.90

TURNOVER RATIOS

 

 

 

Fixed Assets

1.09

0.94

0.75

Inventory

8.60

8.88

7.84

Debtors

6.34

8.19

7.39

Interest Cover Ratio

13.04

12.19

4.90

Operating Profit Margin (%)

25.16

23.18

20.60

Profit Before Interest and Tax Margin (%)

21.20

18.60

14.95

Cash Profit Margin (%)

16.88

16.15

13.18

Adjusted Net Profit Margin (%)

12.92

11.57

7.53

Return on Capital Employed (%)

33.40

25.62

16.61

Return on Net Worth (%)

27.66

25.59

15.30

 

STOCK PRICES

 

Face Value

Rs.10/-

High

Rs.111.40

Low

Rs.108.00

 

LOCAL AGENCY FURTHER INFORMATION

 

History:

 

Incorporated in May'76, Gujarat Narmada Valley Fertilisers Company (GNFC) is a joint-sector company jointly promoted by the Gujarat government and Gujarat State Fertilisers Company. The Company has its presence in Fertilizer Business, Industrial Chemical Business and Information Technology Business. 

 
 In Jul.'92, GNFC came out with a rights issue to meet normal capital expenditure, augment long-term working capital requirements and revamp ammonia/urea plants at a project cost of Rs 2340.000 Millions  GNFC has the world's largest single-stream, fuel-oil-based ammonia and urea plants. It tied up with Kemira, Finland, and Leonard, US, to set up a 10,000-tpa formic acid plant in 1988. It established a joint venture with Chematur, Sweden, and IBI Chematur, Bombay, to form Narmada Chematur Petrochemicals, to produce 20,000 tpa of toluene di-isocyanate with DuPont technology.

  
 
 In 1985, it implemented a 20,000-tpa methanol project. It commissioned a 50-MW captive power project in two phases, the first in 1987 and the second in 1989. In 1991, it established a 1,42,500-tpa nitro-phosphate plant and a calcium ammonium nitrate plant.  


 
 During 1999-2000, the Company inaugurated Infotower at Ahmedabad. The Company through Infotower has diversified into Information Technology. The Company has signed MOU's with business partners having technical strength for strategic alliances. The Projects include Telemedicine, Software Development, V-Sat Services, Internet Service Provider (ISP) services, Internet Gateway, Certification Authority etc. 


 
 The Company signed an agreement with B P Chemicals UK for revamping of the Acetic Acid Plant. Subsequent to the capacity was enhanced from the existing 50,000 TPA to 1,00,000 TPA. The company has decided to convert the Pneumatic instrumentation system of the Ammonia plant into Digital Control System. During 2004-05 the company completed the capacity enhancement of Formic Acid plant by revamping of the purification section utilising spare columns and its reboiler available from Acetic Acid Plant and further the company has sucessfully revamped and commissioned a new parallel Methyl Formate Section. This project was completed at an investment cost of Rs 90.000 Millions. 


 
 Some of the projects of the company which are under implementation are Air Separation Unit Revamping at an estimated cost of Rs.580.000 Millions  and this project is expected to be completed by July 2005. Hydrogen PSA Revamping by increasing the production about 1200 NM3/Hr and this project was completed in April 2005 and was commissioned on 15th May 2005. A New Methanol Synthesis Unit is being setp up utilising the spare reactor available from Methanol-I plant after Isothermal reactor revamping. The project is estimated at an cost of Rs.300.000 Millions  and expected to be completed by February 2006. A New Ammonium Nitrate Melt filling station with a capacity of about 400MT per day is being set up at a cost of Rs.110.000 Millions  and this is expected to be completed and commissioned by September 2005. The company has also decided to shifts its existing filling stations of all industrial products at a distant locations from the plants at a estimated cost of Rs.250.000 Millions and this is expected to be commissioned in January 2006. 


 
 The Company has planned to install an urea plant at an cost of Rs.150.000 Millions and this is expected to completed by 2005-06. The company has also planned to increase the production of Methanol about 175 MT per day by capacity enhancement of SGGU, Methanol reformer revamping and synthesis section revamping and forming a new Methanol Distillation Unit and this project is expected to be completed by 2007. 


During the year 2004-05 the company has increased the installed capacity of Methanol and Formic Acid by 30000 MT and 5000 MT respectively. With this expansion the total installed capacity of Methanol and Formic Acid has increased to 150000 MT and 10000 MT respectively.

 
During October 2005 the company has decided to merge Narmada Chematur Petrochemicals Limited,a wholly owned subsidiary of the company, with the company. The Scheme of Merger is subject to approvals. 


 
 The Company has commissioned PKI Project during 2004-05 and the construction of this project was completed by May 2004. It is a separate division named (n)Solutions.

 

FINANCIAL RESULTS: 

 
 Sustained and dedicated efforts, focused attention, excellent monitoring and a deep sense of commitment of employees at all levels have helped the Company posting the impressive Financial Results for the year under review. 

 
 Profit before tax for the year was significantly higher at Rs.4465.500 Millions, registering a growth of 35% in comparison to last year. Net Profit for the year too, was significantly higher at Rs.2947.200 Millions, registering an appreciable growth of 32% over the last year. 

 

PERFORMANCE HIGHLIGHTS & FERTILIZER POLICY: 

 
 'Management Discussion & Analysis' forming part of this Report deal with the operational and marketing highlights as also the status of various projects completed during the year, projects under execution and projects on anvil, in a comprehensive manner. 

 
 The performance highlights, however, in brief are mentioned hereunder: 

 
Operational Highlights: 


 
 As a sequel to Company's constant search for excellence through various innovative methods and the continued thrust on higher productivity, the Company has, during the year, established as many as 104 new records in terms of production, marketing and dispatch. All the plants of the Company performed at over 100% capacity utilization. Both, the Ammonia and Urea Plants of the Company achieved over 100% capacity utilization for the 15th year in succession. Highest ever yearly production of Ammonia, Methanol, Formic Acid, Acetic Acid, Methyl Formate, WNA, CNA, ANP and CAN was achieved during the year, breaking thereby all past records in the last 25 years. 


 
 Ammonia Plant produced 5,22,090 MTs of Ammonia, registering a capacity utilization of 117%. Methanol-I Plant produced 60,526 MTs of Methanol with a capacity utilization of 121% and the Methanol-II Plant produced 1,61,801 MTs of Methanol with a capacity utilization of 162%. Formic Acid Plant produced 15,456 MTs of Formic Acid and the Acetic Acid Plant produced 1,42,978 MTs of Acetic Acid, registering capacity utilization of 155% and 143% respectively. Nitrophosphate Group of Plants produced 2,03,575 MTs of ANP and 1,72,808 MTs of CAN Fertilizers, registering capacity utilization of 143% and 121 respectively. In addition, Nitrophosphate Group of Plants produced 3,01,548 MTs of WNA and 70,600 MTs of CNA registering capacity utilization of 122% and 107% respectively. The production of Urea was however, contained to 6,42,832 MTs. Urea production was restricted as per the Government guidelines. 
 
Marketing Highlights: 

 
 The Marketing operations of the Company excelled by achieving a turnover of Rs.22813.300 Millions Crores which is the highest ever in the history of the Company. Sales turn-over registered a growth of around 18% over the last year, which was mainly backed by higher volumes of Chemicals produced and increase in the selling price of Chemical products. Total 1.245 Millions MTs of Fertilizers were sold during the year, compared to 1.364 Millions MTs of Fertilizers sold during last year. The sale of fertilizers was lower due to there being no handling of Imported Urea by the Company during the year. The sale of manufactured fertilizers was the highest ever at 1.018 Millions MTs during the year. Of the total sale of 1.245 Millions MTs fertilizers, 0.828 Millions MTs of fertilizers were sold in the primary marketing zone, saving significantly on freight cost. 0.564 Millions MTs of Fertilizers were sold only in Gujarat. 

 
 The sales of own Industrial products was also higher by Rs.1333.000 Millions as compared to last year. This was due to higher sale of Acetic Acid and AN Melt and the better sales realization of Acetic Acid. 

 
 Fertilizer Policy: 


  As you are aware, the Government of India (GOI) had introduced a New Pricing Scheme (NIPS) for Urea, with effect from 1st April, 2003 to be implemented in three stages. The first and second stages of NPS are over and the third stage of NPS has commenced from 1st April, 2006. A Working Group under the Chairmanship of Dr. Y.K. Alagh, constituted to review the implementation of the first and second stage of NPS, has already submitted its recommendations to GOI. Announcement on the Fertilizer Policy for the third stage of NPS by GOI is awaited, which will interalia include a policy for the conversion of feed stock for the existing fuel oil/LSHS based Companies. 

 

SUBSIDIARY COMPANIES: 

 
The Company has two subsidiary Companies viz., Narmada Chematur Petrochemicals Limited. and ING Satcom Limited. 

 
 Narmada Chematur Petrochemicals Limited., continued its onward march towards achieving better performance and posted excellent financial results by achieving the highest ever profit before tax and the profit after tax, during the year under review. ING Satcom Limited., a wholly owned subsidiary of the Company has yet not commenced the business as set-out in its Memorandum of Association. The purpose of incorporating ING Satcom Limited., as  
 
 a wholly owned subsidiary not being served, the Directors of the Company have already decided to wind-up ING Satcom Limited. 


 
 On an application made by the Company under Section 212(8) of the Companies Act, 1956, the Department of Company Affairs, New Delhi, has vide its letter No. 47/264/2006-CL-III dated 23.6.2006, exempted the Company from attaching a copy of the Balance Sheet and the Profit & Loss Account of the Subsidiary Companies and other documents required to be attached under Section 212(1) of the Act to the Annual Accounts & Reports of the Company. Accordingly, the said documents are not being attached with the Balance Sheet of the Company. 
 
 The copies of the Annual Reports of the subsidiary Companies - Narmada Chematur Petrochemicals Limited. and ING Satcom Limited., will be made available to the shareholders on request and will also be kept for inspection by any investor at the Registered Office of the Company and of the Subsidiary Companies. 

 

MERGER/AMALGAMATION: 
 
 The Company had initiated an exercise to evaluate the business rationale for maintaining NCPL as its subsidiary and evaluated its merger with the Company. It was considered that amongst others, the merger will open-up new avenues for product planning and product development as also effective marketing. It will also unlock various synergies. Accordingly, under the orders of the Hon'ble High Court of Gujarat, the Company had sought the approval of Shareholders for the proposed merger of NCPL with the Company. The Shareholders of the Company have approved the Scheme of Amalgamation, subject to requisite approval being received from Hon'ble High Court of Gujarat. Upon the scheme of amalgamation of NCPL with the Company becoming finally effective, the merger will be effected from the appointed date i.e. 1st April, 2005, stipulated in the Scheme of Amalgamation. 

 

MANAGEMENT DISCUSSION AND ANALYSIS: 

 

INDUSTRY STRUCTURE AND DEVELOPMENTS: 

 
 The year 2005-06 turned out to be a good year for the Fertilizer Industry. Rainfall was good and so was the demand of fertilizers. Sales were brisk. Most of the manufacturers and importers did not find it very difficult to sell their fertilizers. Consequently, discounts and rebates were at their lowest. Inventory carrying costs came down too. Partial decontrol of movement and sale of Urea initiated by the Government of India during 2003-04 continued during 2004-05 and 2005-06 and is continuing during the current year too. There were no other significant changes in the Government policy relating to the Fertilizer Industry. 
 
 The Company is mainly engaged in the business of manufacturing and selling of fertilizers and industrial chemicals alongwith trading in fertilizers and also in the business of Information Technology services. The manufacturing facilities of the Company are situated at Bharuch while IT Services, Infotower and PKI are at Ahmedabad, Gujarat. 


 
 The Company manufactures and distributes fertilizers like Urea, Ammonium Nitro-phosphate (ANP) and Calcium Ammonium Nitrate (CAN) and chemicals like Ammonia, Weak Nitric Acid, Concentrated Nitric Acid, Methanol, Acetic Acid, Formic Acid and various services in the area of Information Technology. This year, the Company undertook trading in fertilizers like DAP, Muriate of Potash (MOP), Single Super Phosphate (SSP) etc., and chemicals like Acetic Acid. In the total turnover, the share of Company's fertilizer and chemical divisions was 59% and 40% respectively including that of traded products. 


 
 The year under review has posted the outstanding financial performance with the highest ever Sales Turnover, Profit Before Tax (PBT) and Profit After Tax (PAT) together with several milestones achieved in the areas of production, sales and despatches. The Company's consistent performance has always endorsed its vision. The continuous efforts of the Management for cost reduction in various areas of operations and focus on consolidation have resulted in positive gains to the Company. The Company achieved the highest ever sales during the year at Rs.22813.300 Millions as compared to that of Rs.19355.300 Millions during the previous year, an increase of 18% over the previous year. The Company has also achieved the highest ever Net Profit during the year at Rs.2947.200 Millions as compared to that of Rs.2240.200 Millions during the previous year, an increase of 32% over the previous year. 

 

OPPORTUNITIES & THREATS: 


Merger of the subsidiary, Narmada Chematur Petrochemicals Limited., with the Company will bring benefits of vertical integration and diversification. 


 
 To avail the benefit of Government policy for Feed Stock Conversion, Company is assessing the technoeconomic feasibility for converting feed stock of Ammonia plant from LSHS to natural gas. The policy is under review by Government of India, Ministry of Fertilizers and is likely to be finalised shortly. 


Owing to the big demand-supply gap of Methanol in India, Company is expanding the capacity of the Methanol plant by revamping, which will help the Company in maintaining its leadership position in the Country. 


 
 With availability of raw materials in-house, Company is a market leader in Methanol, Acetic Acid and Formic Acid and is better placed to expand the capacities of these products and can successfully face global competition. 


 
 In order to ensure continuity of production, Company has entered into contract for its feed stock with M/s Indian Oil Corporation with an appropriate price variation formula on import parity level. Long term contracts are also finalized for other important raw materials like Coal, Gas, Rock Phosphate, etc. 


 
 With better Cash generation year after year and easy liquidity position, the Company took advantage by prepaying high cost loans to its lenders and thereby reducing the interest cost to the Company. Relatively stable interest rates improved infrastructure for import/export, easy availability of petrochemicals raw materials like natural gas, favourable government policies etc. are the positive factors to encourage the new investments. 


 
 Growth by way of revamping and improvement in productivity by optimising resources and technical innovations is adopted by the Company and is a continuous process. 

 
 The Company is well poised to provide commissioning assistance and other technical services to other industries due to its highly qualified and experienced manpower. 

 
 With availability of extensive marketing network throughout the Country, trading in fertilizers and chemicals can be increased further. 


 
 Brand image of the Company's fertilizers is very good. This will help the Company to consolidate the markets in the primary marketing zone in the partial decontrol scenario at present and total decontrol scenario in the future. 

 
 With an increase in the irrigation facilities due to the Sardar Sarovar, there is a good potential for an increase in the demand of fertilizers in Gujarat. The Company and its products are well placed to seize this opportunity

 

CMT REPORT [Corruption, Money laundering & Terrorism]

 

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

 

1]         INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

 

2]         Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

 

3]         Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

 

4]         Record on Financial Crime :

            Charges or conviction registered against subject:                                                   None

 

5]         Records on Violation of Anti-Corruption Laws :

            Charges or investigation registered against subject:                                                           None

 

6]         Records on Int’l Anti-Money Laundering Laws/Standards :

            Charges or investigation registered against subject:                                                           None

 

7]         Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

 

8]         Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

 

9]         Compensation Package :

Our market survey revealed that your amount of compensation sought by your subject is fair and reasonable and comparable to compensation paid to oyourrs for similar services.

 

10]       Press Report :

            No press reports / filings exists on your subject.

 

 

CORPORATE GOVERNANCE

 

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. Yourse factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

 

Our Governance Assessment focuses principally on your interactions between a company’s management, its Board of Directors, Shareholders and oyourr financial stakeholders.

 

 

CONTRAVENTION

 

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or oyourrwise affect your terms and conditions that could be included in your agreement with your subject.

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.44.17

UK Pound

1

Rs.86.66

Euro

1

Rs.57.25

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

5

PAID-UP CAPITAL

1~10

5

OPERATING SCALE

1~10

5

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

5

--PROFITABILIRY

1~10

5

--LIQUIDITY

1~10

5

--LEVERAGE

1~10

5

--RESERVES

1~10

5

--CREDIT LINES

1~10

5

--MARGINS

-5~5

--

DEMERIT POINTS

 

 

--BANK CHARGES

YES/NO

YES

--LITIGATION

YES/NO

NO

--OYOURR ADVERSE INFORMATION

YES/NO

NO

MERIT POINTS

 

 

--SOLE DISTRIBUTORSHIP

YES/NO

NO

--EXPORT ACTIVITIES

YES/NO

YES

--AFFILIATION

YES/NO

YES

--LISTED

YES/NO

YES

--OYOURR MERIT FACTORS

YES/NO

YES

TOTAL

 

45

 

This score serves as a reference to assess SC’s credit risk and to set your amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of your major sections of this report. Your assessed factors and yourir relative weights (as indicated through %) are as follows:

 

Financial condition (40%)              Ownership background (20%)                   Payment record (10%)

Credit history (10%)                    Market trend (10%)                                  Operational size (10%)

 

 

RATING

STATUS

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with your strongest capability for timely payment of interest and principal sums

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

26-40

B

Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

Credit not recommended

 

 

 

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use your information as aid only in determining your propriety of giving credit and generally as an aid to your business and for no oyourr purpose. You will hold your information in strict confidence, and shall not reveal it or make it known to your subject persons, firms or corporations or to any oyourr. MIPL does not warrant your correctness of your information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of yourse conditions